Service Tax for Societies – whether 12.36% or 14% to be applied for 1st April, 2015 invoices?

“To facilitate a smooth transition to levy of tax on services by both the centre and the states… the service tax rate is being increased from 12 per cent plus education cesses to 14 per cent. The education cess and secondary and higher education cess shall be subsumed in the new service tax rate. The revised rate shall come into effect from a date to be notified,” finance minister Arun Jaitley announced this while presenting the Budget 2015-16. This is the last we heard on applicable Service Tax rates and post that there has not been any update on this matter.

Firstly, the effective date for increase in service tax rate has not been notified by the government. Official word is still awaited on the date from which 14% service tax will be implemented. Also, whether “Swachh Bharat Cess” of 2% imposed in this year budget on certain services is still to be notified. Hence, there is no clarity whether Swachh Bharat Cess would be applicable to Housing Societies or Apartment Complexes.

So, if you are a Treasurer of an apartment complex and are wondering how to calculate the service tax from 1st April onwards, you may continue doing so @ 12.36%. The increase is NOT effective from 1st April, 2015. The Finance Bill, 2015 is pending approval post which one can expect the official date from which revised rate of Service Tax i.e. 14% will be applicable.

Do keep checking this space as we will update the same as soon as there is any official word on it.